Problem 6-11A

Dixon Books uses the retail inventory method to estimate its monthly ending inventories. The following information is available for two of its departments at October 31, 2015.

		Hardcovers						Paperbacks
		Cost			Retail			Cost			Retail
Beginning inventory		$709,800			$1,183,000			$473,200			$608,400
Purchases		3,608,150			5,408,000			1,951,950			2,602,600
Freight-in		40,560						20,280
Purchase discounts		74,360						37,180
Net sales					5,239,000						2,653,300

At December 31, Dixon Books takes a physical inventory at retail. The actual retail values of the inventories in each department are Hardcovers $1,335,100, and Paperbacks $566,150.

Determine the cost-to-retail ratio. (Round answers to 1 decimal place, e.g. 25.5%.)

		Hardcovers		Paperbacks
Cost-to-retail ratio		%		%

Determine the estimated cost of the ending inventory for each department at October 31, 2015, using the retail inventory method. (Round answers to 0 decimal place, e.g. 25,120.)

		Hardcovers		Paperbacks
The estimated cost of the ending inventory		$		$

Compute the ending inventory at cost for each department at December 31, assuming the cost-to-retail ratios for the year are 66% for Hardcovers and 75% for Paperbacks. (Round answers to 0 decimal places, e.g. 25,120.)

		Hardcovers		Paperbacks
The ending inventory		$		$